Leahy Urges New England Attorneys General To Monitor Growing Clout Of Dairy Firm In Region....Overwhelming Dominance Of Regional Market Worries Vt. Lawmaker

March 13, 2000

WASHINGTON (March 13) – Vermont Sen. Patrick Leahy, the Democratic leader of the Senate Judiciary Committee, is urging the attorneys general of the six New England states to monitor the growing market clout of a Texas-based dairy processor.

Citing reports that Suiza Foods now handles or processes more than 70 percent of the milk supply in the New England region, Leahy wrote to the respective attorneys general of Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island, apprizing them of these developments. This letter follows an earlier letter Leahy sent to Joel Klein, head of the anti-trust division of the U.S. Department of Justice, that detailed concerns about the growing consolidation in the dairy industry, especially in the case of Suiza Foods, whose dominance threatens to eclipse competitors not only in New England but nationwide. The firm is also now the nation's largest dairy operator.

In his letter to the attorneys general, which listed several recent Suiza acquisitions and mergers in the New England region, Leahy wrote:

"Recent news reports here in New England have noted that Suiza Foods has acquired several milk processing plants in the region. Suiza Foods appears to have settled upon a strategy of investing in existing plants and then shutting them down. Presumably, Suiza would then import milk from outside the region to meet demand. The damaging consequences of this corporate strategy for farmers and consumers alike, if true and unchecked, could be severe....I believe the increasing clout and market share of this firm within New England bears close scrutiny."

"The apparent acquisition and close down strategy of Suiza should sound the alarm throughout New England," said Leahy. "A marketplace of few farmers and fewer handlers serves no one, except perhaps a handful of already wealthy processors angling for more. Vigorous oversight is needed if we are to assure robust competition and a continued supply of fresh milk at reasonable prices."

Leahy also noted that he was readying comprehensive agriculture antitrust legislation for introduction soon that would, among other provisions, create a new office within the Justice Department for agriculture antitrust matters; increase monetary penalties for violations of existing antitrust laws; strengthen existing laws barring discriminatory or deceptive business practices; and, with fines collected from violations of existing antitrust law, create a new government account to compensate farmers harmed by these unfair practices.

A copy of one of the Leahy letters (two pages) is available upon request: